The newly revamped Office of Intellectual Property Administration is working to get the ideas and inventions of UCLA researchers into the marketplace.
F or a decade, Farhad Parhami ’89, Ph.D. ’94 has studied the science of lipid biology. Now he is hoping that the advances he’s made may contribute to the prevention or cure for osteoporosis, the debilitating disease that makes bones porous and brittle and prone to excruciating injuries.
“The outcome can be devastating,” says Parhami, an assistant professor in the Department of Medicine, Division of Cardiology at the David Geffen School of Medicine at UCLA. “Losing function of one’s arms or legs. Chronic pain from vertebral fractures. Becoming bedridden. It’s really horrible.”
Parhami believes that the groundbreaking discoveries he and his research team have made about oxysterols — by-products of cholesterol oxidation that stimulate bone-forming cells called osteoblasts — can help.
“It’s very exciting,” he says. “Every time I talk about this, people in the bone field show a lot of enthusiasm and excitement about its possible implications.”
Parhami is one of nearly 2,400 faculty researchers at UCLA devoted to finding solutions to some of life’s most perplexing problems. Supported by grants totaling $785.9 million in Fiscal Year 2002 – ’03 — including $564.4 million from state and federal sources, $99.6 million from private corporate and foundation grants and $121.8 million from other sources — they have earned UCLA unquestionable status as one of the world’s premier research universities.
While technology transfer between academia and business has a long history at the University of California, UCLA in 1990 became the first campus in the UC system to establish a technology-transfer program of its own. Interest quickly exceeded staffing and other resources, however, and UCLA found itself lagging behind other top universities in moving creative ideas from the lab to the marketplace.
“We lost opportunities to leverage many of the exciting ideas coming from our campus,” says Chancellor Albert Carnesale. “This reinforced a culture that did not encourage our faculty to be entrepreneurs.”
Determined to rectify this, Carnesale directed a major reorganization of the Office of Intellectual Property Administration (OIPA) under the leadership of Executive Director Andrew Neighbour.
“The assets and opportunities are here,” says Neighbour, “and particularly the need to serve our faculty is here. Those who wish to commercialize technology deserve to get value-added assistance from the technology-transfer program.”
While tech transfer serves the university, business and society, ultimately it serves the faculty — researchers who may benefit professionally and financially by the commercialization of inventions that are, by law, owned by UC as a state-supported university. This arrangement between the university and its faculty is also mandated by the federal Bayh-Dole Act, which requires that inventions developed with taxpayers’ money must be diligently managed by the university where the research was performed.
The challenge of managing faculty-developed intellectual property is well understood by Neighbour, who earlier in his career was a researcher in the fields of virology and embryology at Albert Einstein College of Medicine in New York. He then served in private industry and for four years directed the Center of Technology Management at Washington University in St. Louis, Mo.
Under his leadership, OIPA has grown from five to 17 staff members with expertise in business development as well as intellectual property.
Says Neighbour: “We’ve hired people whose job it is to roam the hallways, talk with faculty, find the inventions and opportunities.”
This includes people like George Abe, an OIPA business-development manager whose passion, based on his background in venture-capital firms and at high-tech firms like Cisco Systems, Inc. and dot-coms, is helping faculty launch their own companies. Abe works out of Boelter Hall at the Henry Samueli School of Engineering and Applied Science. “I attend lectures, go to seminars and research reviews,” he says. “If I think something’s interesting, I’ll make a point of sitting down with the professor to get more acquainted with the technology and help them see what they might do with it.”
Parhami connected with Abe after approaching OIPA with the intent of pursuing a patent for his oxysterol discovery. “What we discovered was that these oxysterols could stimulate the formation and activity of bone-forming cells, and we realized that is something that’s going to be very important,” Parhami says. It also is something unlike any other form of therapeutic treatment for osteoporosis on the market — a fact that became increasingly clear as Parhami worked with OIPA and talked with colleagues.
Parhami is eager to accelerate his research, while staying committed to remaining at UCLA as an academic, even while facing great limitations and difficulties in finding sufficient university-based funding and resources. To overcome these difficulties, Parhami has decided he wants to start his own company: Osteoscience. To this end, he has found allies in Abe and OIPA technology-transfer officer Rebecca Goodman, whose background includes a degree in biology and a law degree with specialization in intellectual-property law. With their guidance and encouragement, Parhami also connected with M.B.A. student Matt Abbott and Assistant Adjunct Professor Robert Foster M.B.A. ’65 at The Anderson School, who helped him develop a professional business plan — a plan that Abe and Goodman helped him to further flesh out.
Abe also teaches a class in entrepreneurship at The Anderson School to a mix of business, engineering and medical students. “I look to see if they’ve got this look in their eyes that tells me they are really an entrepreneur,” Abe says.
Parhami has that look, Abe says. Says Parhami, “My entrepreneurial spirit has grown because of the discoveries we have made and the exposure I have to the business aspects.”
Goodman has had extensive meetings with Parhami. “I toss out questions, help him think through what his motivations are for a start-up company,” she says. “The more people that an entrepreneur or an inventor can talk with to clarify their ideas, the better prepared and more confident they are when it may really matter — when they’re doing a pitch in front of potential investors.”
Following months of preparation, Parhami found himself making such a pitch to the Tech Coast Angels (TCA), a group of some 220 businesspeople in Los Angeles, Orange and San Diego counties. Through OIPA, TCA holds bimonthly investor forums on campus to which faculty researchers like Parhami are invited to make presentations. If the Angels like what they hear, they could potentially invest $250,000 to $2 million in seed and early-stage projects.
“We have had a major interest in university-based technology transfer because we see great opportunities,” says Gary S. Lazar, a lead member of the TCA and managing director of California Technology Ventures, Inc.
TCA also provides business mentoring because, Lazar notes, as brilliant as a faculty member’s research may be, many “have not considered any aspect of the hard business parameters. They are focused on their research, not on the market or who their customer is. We’re willing to meet with faculty and give them a road map.”
Another resource is a new, pre-seed investment fund spearheaded by OIPA Director Neighbour and David Lundberg, director of strategic alliances for both OIPA and UCLA’s Department of Development. The fund, in which California venture-capital firms invest, will provide $25,000 to $30,000 pre-seed money to researchers to move forward in developing prototypes or hiring a graduate student to conduct additional research. These funds are primarily intended for researchers whose federal funding prohibits them from pursuing commercial aspects of their work with those same monies. The new fund is poised to announce its initial investments this fall.
While he pursues funding, Parhami has meanwhile had OIPA’s assistance and support in obtaining two provisional U.S. patents for his discovery. OIPA makes decisions to pursue a patent — which can take up to five years and cost up to $40,000 for U.S. rights alone — on a case-by-case basis, as not all inventions are patentable or commercially viable, says Goodman.
Once a patent is completed and successfully added to UCLA’s portfolio, OIPA pursues licensing — and more inventively and aggressively than ever before. A detailed database helps sort out potential customers, who are contacted individually. A Web site newsletter — “What’s Bruin in the Labs?” — describes inventions and inventors to an online audience ranging from business-development officers at Fortune 500 companies to venture capitalists and investment bankers.
OIPA staff also maintain ongoing relationships with hundreds of companies and contacts in business and industry. This past summer, OIPA introduced members of the investment community to researchers in fields ranging from nanotechnology to molecular genetics at the First Annual Review of Research.
Still, in spite of all the efforts, “chances are that nobody will notice some of these early inventions for awhile,” Neighbour says. This is simply the nature of university research, he explains, which tends to explore new ideas in their earliest stages of gestation. “Often, nobody quite knows what these ideas are good for,” he says. “It’s going to be several years before anybody wants to take that technology and do something with it.”
Parhami could face an especially long uphill climb because this delay is particularly true in medical therapeutics, where millions of dollars can be spent on research over a period of as long as 15 years to win FDA approval for a new drug or device.
Nevertheless, there are signs that OIPA’s efforts are paying off: The office has seen a significant increase in the number of faculty members reporting new inventions. From an average of 130 inventions per year for the five years preceding OIPA’s reorganization, new-invention disclosures rose to 170 last year and are expected to continue to increase. Also last year, 57 new U.S. patents were filed, 43 new U.S. patents were issued and the number of new licenses executed, 25, was double that of the previous year. In one recent agreement alone, Samsung Electronics licensed nine patents in multimedia communications, patents developed in the Image Communications Laboratory of Engineering Professor John Villaseñor.
Currently, OIPA is managing 725 active cases in its intellectual-property portfolio, with 350 active, issued patents. UCLA’s licensing activity returns $10 million a year in royalty and fee income, which is shared with inventors, their labs and research programs at UCLA.
Although Neighbour is very optimistic about OIPA’s growth, “It will be many years before we see a commensurate increase in revenues, because you only really see big money when you have a product selling in the marketplace and you’re collecting annual royalties,” he notes. “The lead time from license to the market can be anywhere from two to 15 years.”
Yet, he adds, “At the end of the day, tech transfer is not about the money. Tech transfer is about creating an environment where our researchers will flourish. It’s a business-development process.”
Parhami is eager to move forward — but he is patient. He is seeking what he estimates to be about $11 million in research and development support over a period of five years. He will start, he hopes, with about $600,000 from the Tech Coast Angels. “That will get us to the next stage,” he says, “to the next round of financing.
“We wouldn’t have gotten this far without the positive feedback and guidance of OIPA,” Parhami says. “They just kept telling me, ‘Come back and work with us. One way or another we’re going to try to help you.’”
If funding doesn’t materialize, he says, an alternative might be to find an industry partner — “maybe a pharmaceutical company that will license the patent from UCLA and then give us the resources that we want to do our research.”
He’d still prefer to start his own company, he admits, but he’ll take it as it comes, just so he can keep moving forward.
“There are people who do science because of the enjoyment of discovering a scientific fact, and that is wonderful,” Parhami says. “But an additional thing that I expect from my work is to help somebody who is suffering from a disease. And in order to do that, I need a lot of resources.”
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